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Corporate supply chains the next frontier for renewables

Big corporations are moving towards more sustainable business models – and it won't be long before their value chains have to follow, writes Tom Lindberg

At COP21 in Paris and following the launch of the UN Sustainable Development Goals, companies saw new and significant business opportunities in adapting to climate change, innovating business models to address global challenges, while becoming increasingly competitive.

This new foundation for growth is good for the climate and shareholders.

Many leading corporations “get the big picture”, and have already reduced their carbon footprint significantly. At the opening of the Climate Week in New York City in September 2017, Anne Finucane, vice chair at the Bank of America, underlined the business case for big banks to transition to 100% renewable electricity. “We’re all making money at it,” she said, “you will see greater investment in renewables because we see business there.”

Today, 111 of the world’s most influential companies have committed to 100% renewable electricity through the initiative RE100, and the number of members is growing fast. Together, these companies are creating a demand of more than 150TWh of renewable electricity, more than enough to power the entire New York State. RE100 is a collaborate initiative uniting global brands committed to 100% renewable power, many of them as soon as 2020.

These companies have made a public pledge, and further disclose their progress to RE100 on an annual basis. The latest companies to join RE100 are The Estee Lauder Companies, DBS Bank, Kellogg Company and JP Morgan Chase & Co.

A recent study, conducted by the UK think tank InfluenceMap , shows that companies like Apple, Unilever and IKEA are among the top three most influential companies globally that are pushing for ambitious climate policies aligned with the Paris Agreement. These three companies are also part of RE100.

But, the study also found that a significant number of global industrial corporations are still sitting on the fence – and that 35 of the 50 most influential companies are even actively lobbying against widely accepted global climate policies. The companies include ExxonMobile, Valero Energy, Chevron from the fossil fuel value chain, in addition to powerful automotive manufacturers like Fiat Chrysler, Ford, and Daimler among others.

Purchasing tracked and documented renewable electricity from the grid, or from specific renewable projects, is often the easiest and most effective way for a company to address sustainability. In September, General Motors announced a new 200MW wind energy deal that will power manufacturing plants in the US, and bring the company’s renewable energy coverage up to 20% of all electricity used in 2018. This is clearly a step in the right direction.

"Thirty-five of the 50 most influential companies are even actively lobbying against widely accepted global climate policies"

RE100 will gain even further momentum when memberships reach even higher levels. But, I am certain that what will really transform this from a movement to “a torrent” is when we see more of the ambitious RE100 members starting to push their own renewable targets down their value chains. This will start a chain reaction resulting in thousands of supplying companies – large and small – being “forced” to reflect the same ambitious targets as their customers have.

Internationally the trend shows a great demand for renewable energy, and this trend is likely to accelerate further – both among private consumers, cities, and businesses. What is currently missing, is the same engagement among large industrial, energy intensive companies.

There are definitely good exceptions, but still a large number of them are still undecided in how to approach setting ambitious enough renewable targets. Many of these companies, unlike the majority of RE100 members, are not well-known consumer brands, but rather 2 nd or 3 rd tier supplying companies.

I believe pressure from the RE100 members toward their most critical suppliers, will soon spur also the large industrials to adopt a different sense of urgency than we have seen so far. To further entice the large industrial energy intensive companies, RE100 may consider providing more industry specific paths to reaching 100% renewable consumption.

Hundreds of companies globally now recognise that the transition to a low-carbon economy is the only way to secure sustainable economic growth. Although this is still a fairly limited number of companies, these leading businesses are clearly paving the trail for others to follow.

The corporate world, stepping up its purchase of, and investments in renewable energy, will contribute significantly to accelerating the global transition from fossil to renewable power.

Tom Lindberg is managing director or ECOHZ, a corporate energy consultancy based in Oslo, Norway

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Corporate supply chains the next frontier for renewables

Big corporations are moving towards more sustainable business models – and it won't be long before their value chains have to follow, writes Tom Lindberg

At COP21 in Paris and following the launch of the UN Sustainable Development Goals, companies saw new and significant business opportunities in adapting to climate change, innovating business models to address global challenges, while becoming increasingly competitive.

This new foundation for growth is good for the climate and shareholders.

Many leading corporations “get the big picture”, and have already reduced their carbon footprint significantly. At the opening of the Climate Week in New York City in September 2017, Anne Finucane, vice chair at the Bank of America, underlined the business case for big banks to transition to 100% renewable electricity. “We’re all making money at it,” she said, “you will see greater investment in renewables because we see business there.”

Today, 111 of the world’s most influential companies have committed to 100% renewable electricity through the initiative RE100, and the number of members is growing fast. Together, these companies are creating a demand of more than 150TWh of renewable electricity, more than enough to power the entire New York State. RE100 is a collaborate initiative uniting global brands committed to 100% renewable power, many of them as soon as 2020.

These companies have made a public pledge, and further disclose their progress to RE100 on an annual basis. The latest companies to join RE100 are The Estee Lauder Companies, DBS Bank, Kellogg Company and JP Morgan Chase & Co.

A recent study, conducted by the UK think tank InfluenceMap , shows that companies like Apple, Unilever and IKEA are among the top three most influential companies globally that are pushing for ambitious climate policies aligned with the Paris Agreement. These three companies are also part of RE100.

But, the study also found that a significant number of global industrial corporations are still sitting on the fence – and that 35 of the 50 most influential companies are even actively lobbying against widely accepted global climate policies. The companies include ExxonMobile, Valero Energy, Chevron from the fossil fuel value chain, in addition to powerful automotive manufacturers like Fiat Chrysler, Ford, and Daimler among others.

Purchasing tracked and documented renewable electricity from the grid, or from specific renewable projects, is often the easiest and most effective way for a company to address sustainability. In September, General Motors announced a new 200MW wind energy deal that will power manufacturing plants in the US, and bring the company’s renewable energy coverage up to 20% of all electricity used in 2018. This is clearly a step in the right direction.

"Thirty-five of the 50 most influential companies are even actively lobbying against widely accepted global climate policies"

RE100 will gain even further momentum when memberships reach even higher levels. But, I am certain that what will really transform this from a movement to “a torrent” is when we see more of the ambitious RE100 members starting to push their own renewable targets down their value chains. This will start a chain reaction resulting in thousands of supplying companies – large and small – being “forced” to reflect the same ambitious targets as their customers have.

Internationally the trend shows a great demand for renewable energy, and this trend is likely to accelerate further – both among private consumers, cities, and businesses. What is currently missing, is the same engagement among large industrial, energy intensive companies.

There are definitely good exceptions, but still a large number of them are still undecided in how to approach setting ambitious enough renewable targets. Many of these companies, unlike the majority of RE100 members, are not well-known consumer brands, but rather 2 nd or 3 rd tier supplying companies.

I believe pressure from the RE100 members toward their most critical suppliers, will soon spur also the large industrials to adopt a different sense of urgency than we have seen so far. To further entice the large industrial energy intensive companies, RE100 may consider providing more industry specific paths to reaching 100% renewable consumption.

Hundreds of companies globally now recognise that the transition to a low-carbon economy is the only way to secure sustainable economic growth. Although this is still a fairly limited number of companies, these leading businesses are clearly paving the trail for others to follow.

The corporate world, stepping up its purchase of, and investments in renewable energy, will contribute significantly to accelerating the global transition from fossil to renewable power.

Tom Lindberg is managing director or ECOHZ, a corporate energy consultancy based in Oslo, Norway